Curve Finance founder, Micheal Egorov, is facing a significant liquidation risk due to his involvement in loans backed by CRV tokens. This has resulted in a 30% drop in the value of CRV tokens. According to data from Lookonchain and Arkham, Egorov has taken out loans totaling nearly $100 million, primarily in stablecoins like crvUSD, using $140 million in CRV tokens as collateral.
Following the automatic liquidation of Egorov’s positions, there was a flurry of selling activity, leading to a sharp decline in the price of CRV tokens. Egorov confirmed on X that his positions had been liquidated, stating that he has already repaid 93% of the loan and plans to repay the remainder soon to protect users from the situation.
Egorov’s wallet activity, as tracked by Debank, shows that he has borrowed from various platforms like Inverse, UwU Lend, Fraxlend, and Curve’s LlamaLend, using CRV tokens as collateral. The total value of his holdings across different wallets has decreased by 50% in the past 24 hours.
In an attempt to mitigate risks, Egorov has been actively repaying loans on platforms like Inverse and LlamaLend with different tokens like FRAX, DOLA, and CRV. Additionally, wallet transactions indicate that he has been swapping between CRV and USDT to manage his positions effectively.
The liquidation of Egorov’s substantial position has not only impacted the price of CRV tokens but has also put pressure on other DeFi protocols that use CRV as a trading pair or in trading pools. For instance, one address on Frax Lend experienced $3.3 million in liquidated positions as CRV prices dropped.
This is not the first time Egorov’s borrowing activities have caused disturbances in the crypto market. In 2023, an exploit in Curve lending pools led to a sudden drop in CRV prices, putting over $100 million at risk of being liquidated. To prevent further damage, prominent figures in the DeFi space, such as Justin Sun, intervened by providing liquidity and acquiring CRV tokens at a discounted rate.
As the situation continues to unfold, it is essential for investors and users of DeFi platforms to closely monitor developments related to Curve Finance and CRV tokens. The volatility and interconnected nature of the crypto market emphasize the need for caution and risk management strategies to navigate through such uncertain times.